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Sephora Direct Investing in Social Media Video and Mobile Case Solution

Solution Id Length Case Author Case Publisher
1390 1690 Words (6 Pages) Elie Ofek, Alison Berkley Wagonfeld Harvard Business School : 511137
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Sephora is a notable fashion company that operates in the US and many other countries across the globe. Recently, the marketing budget of the company has just been doubled, and it is necessary to answer a number of questions before proceeding with the allocation of these resources. Sephora wants to win the digital world, and do that, it needs to monitor a number of factors including website traffic, leads, sales and conversions as well. While the company has strong competitors in the digital world, it certainly has a firm position in the market that will help it achieve its short-term and long-term goals. 

Following questions are answered in this case study solution

  1. Executive Summary

  2. Introduction

  3. Conclusion

Case Analysis for Sephora Direct Investing in Social Media Video and Mobile

2. Introduction

A highly successful French chain of cosmetics, Sephora has always been innovative with its promotion strategies and market penetration plans. It is important to notice that the company’s ideas give it a solid edge in the fashion world across the continents. Started in 1969, this multi-million-dollar company has decided to double its marketing budget to be able to reach the objective of achieving a higher level of performance in the world of social media (Sephora, 2016). The main objective of all the key players in the case study is to maintain a strong connection with the customer community to be able to utilize the marketing budget by doing something innovative rather than just providing discounts to the customers and increase sales. 

The objectives certainly go with the purpose of the company whereas rational and bold marketing decisions need to be made in order to reach the desired outcomes. Maintaining a psychological contract with the customer community and gain their trust for a long-term without having to force them to keep buying the products will be a challenge for Sephora while at the same time, loyal consumers can be a resource for it as well.

1. It is highly important for a company to be able to utilize and allocate its resource in the most efficient way possible. If the resource allocation is not competent, there is a bright possibility that the business objectives are not met, and the company ends up facing a financial crisis (Larry & Prodromou, 2015). In the case of Sephora, if it gets the extra budget, this will be a bold transition for the business and it has to allocate them well without being overwhelmed by the capitals. The company needs to scrutinize its digital platforms and their popularity. For instance, Sephora’s Facebook page had over 300,000 fans in 2009, making it the most popular digital platform for the company to communicate with its customers.

Additionally, the ‘wish list’ idea of Sephora became exceptionally successful and provided a unique way to communicate with the customer community. The company should start investing the budget on Facebook pages, contests, online competitions, and other promotional strategies. Other digital platforms including Twitter and Instagram should also be allotted some budget, but more focus should be given to Facebook and YouTube. This is so because Facebook is certainly the most popular social media website while customers really like the DIY videos on YouTube that could help promote the brand even more. Facebook and YouTube don’t only help reach out to the current customers but also help in enveloping potential clients as well.

2. Sephora’s decision to build the Beauty Talk platform was surely a wise decision because it provided the company with a chance to get to know its customer community. The platform did not only answer the product-related questions of the consumers but was also a unique way to help the company understand the needs of its buyers. It had always been the moto of Sephora to get indulged in unique activities to attract customer without just providing them with monetary discounts. The idea behind this approach was that all the other companies are doing the same and providing discounts is not the most efficient way to attract buyers. By providing discounts, the customers might come to buy the product once, but it cannot keep happening forever.

Sephora’s digital media efforts of 2010 were innovative in a variety of terms. They did not only start a whole new trend of ‘candid conversation’ between the buyer and the seller, but also helped in developing a relation of trust and loyalty between Sephora and its customers. Transferring the Beauty Talk from Facebook was a wise decision because differentiating the loyal customers from the others was very difficult on Facebook. Therefore, a separate platform allowed the company to spot its loyal customers and award them for their brand loyalty.

3. There a number of competitors of Sephora that are also highly active on social media and other digital platforms. Therefore, it is necessary for Sephora to be aware of their activities to stay ahead in the business. For instance, Ulta owns more than 600 stores across the United States and thus, can be a potentially strong competitor of Sephora (Bhasin, 2015). Made in 1990, this company is headquartered in Illinois and has strong social media accounts including more than 2 million fans on its Facebook page and more than 500,000 followers on Twitter only (Ulta Beauty, 2016). Additionally, Ulta also actively introduces new trends and themes on its website regarding latest events e.g. proms, Christmas, and valentine’s day, etc. on ‘Ulta Beauty and the Salon’ while the wish list idea of Sephora has also been adopted by Ulta on its Facebook page.

Sephora needs to keep a check on these updates to be able to understand the upcoming trends that Ulta is introducing and design its wide range of marketing strategies accordingly. In this world of technology, social media and digital marketing is a virtual market for companies to promote their brands (Chaffey & Smith, 2012).

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